SBI raises Rs 4,000 crore through AT1 bonds

State Bank of India (SBI) said that the bank has raised Rs 4,000 crore of the Basel compliant Additional Tier 1 (AT1) bonds on Wednesday at coupon rate of 7.72%.

This is the first AT1 Bond issuance in the domestic market post the new regulations of the Securities and Exchange Board of India (Sebi).

SBI said it received bids in excess of Rs 10,000 crore against a base issue size of Rs 1,000 crore. The public sector bank has now decided to accept Rs 4,000 crore at a coupon of 7.72% based on the response.

This is the lowest pricing ever offered on such debt, issued by any Indian bank since the implementation of Basel III capital rules in 2013, a state-owned lender said in a release.

The AT1 instrument is perpetual in nature. However, it can be called back by the issuer after five years or any anniversary date thereafter. While SBI has AAA credit rating from domestic credit agencies, the AT1 offering is rated AA+, which is the highest rating in the country for these instruments in view of the hybrid and high-risk nature of these instruments.

Shares of SBI rose 0.87% to settle at Rs 429.70 yesterday, 1 September 2021.

State Bank of India (SBI) is an Indian multinational, public sector banking and financial services statutory body. As of 30 June 2021, the Government of India held 57.62% stake in the bank.

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